● MONDAY, May 16
Draft state budget for 2016 is in an unprecedented delay, expert
The 2016 state budget hasn’t been yet adopted. It is the longest delay witnessed in the past 20 years. This fact reduces significantly its importance in terms of the public policies that are to be implemented this year. Therefore, the adoption of the draft budget becomes rather a formal task that must be dealt with as soon as possible, said projects coordinator at the Independent Analytical Center “Expert-Grup” Dumitru Budeanschi, who analyzed the draft budget law published by the Ministry of Finance. “Most probably, the presented draft budget law will be adjusted following the approval of the measures stipulated in the budgetary–fiscal policy. Now that the National Bank of Moldova reviewed down its inflation forecast for 2016 (from 10.1% to 7.0%), the Ministry of Finance will have to take this change into consideration as it substantially affects the reasoning for adjusting some of the taxes,” said the expert.
Polish Government accepts first two applications for financing
The Ministry of Finance of Poland said it accepted the first two contractor contracts to the value of €2 million, approved by the Supervisory Board of the public institution “Implementation Unit of the Assistance Loan Provided by the Government of Poland”. According to the Ministry of Agriculture and Food Industry of Moldova, the applications for financing were filed by SRL “Euroforta” and SRL “Axedum”. SRL “Euroforta” intends to build a packing house and to purchase sorting equipment and equipment needed to modernize its cold storage facility. SRL “Axedum” plans to buy equipment for modernizing its abattoir and equipment and sandwich panels for rebuilding/outfitting the halls for growing chickens.
New director named at Public Procurement Agency
Ruslan Malai was appointed as director of the Public Procurement Agency. This took up his duties on May 16. An order to this effect was signed by the minister of finance. According to the Ministry of Finance, Ruslan Malai is a Master of Economy and Law and has a rich experience in the area of procurement. He earlier worked for the Regional Office for Europe and Central Asia of the United Nations Food and Agriculture Organization (FAO), the United Nations Development Program, the Ministry of Education, etc.
● TUESDAY, May 17
IMF: Opaque ultimate beneficial ownership of banks is main problem in Moldova’s banking sector
One of the most important problems in Moldova stems from opaque ultimate beneficial ownership of banks, which boils down to not knowing definitively who controls banks. This allows individuals or groups to gain control of large banks in Moldova while evading proper supervisory control, said Armine Khachatryan, Resident Representative of the International Monetary Fund (IMF) in Moldova, who answered questions from journalists on the financial sector, fiscal policy, and the real economy. “The risk – which materialized in the cases of Banca de Economii, Banca Sociala and Unibank – is that these banks are then run to the private gain of shareholders, without proper checks and balances, and put customers and public finances at risk. Another important problem is political and judicial interference with supervision and regulation of banks. For instance, actions taken by the National Bank of Moldova (NBM) to block shareholders that were acting in concert in a number of banks have been subsequently challenged in courts and suspended,” said the IMF Resident Representative.
Armine Khachatryan: IMF supports completion of independent expert assessment
Armine Khachatryan, Resident Representative of the International Monetary Fund (IMF) in Moldova, said the IMF supports the completion of an independent expert assessment of the central bank supervisory process regarding the fraudulent transactions that occurred during 2012-2014. But this will not be part of technical assistance as the IMF does not have the expertise to conduct such assessments. “The assessment will aim to cover all aspects of the supervisory process, including actions taken by the central bank as a supervisor, laws and regulations in place, and the degree of freedom/independence the central bank had. The outcome of this work will be an important input into understanding what went wrong, and what were the fundamental loopholes in the system,” Armine Khachatryan stated when answering questions from journalists on the financial sector, fiscal policy, and the real economy.
Economic growth in Moldova is highly vulnerable, opinion
Moldovan economic growth is highly vulnerable, it is affected by external shocks from trading partners and global developments, and by domestic shocks, such as episodes of political volatility, as well as weather/climate related shocks. The slow economic recovery will be influenced by lingering effects of the last year’s drought, seconded by weak recuperation of domestic demand given the slow recovery of remittances, weak capital expenditures and financing constraints across the economy, Armine Khachatryan, Resident Representative of the International Monetary Fund (IMF) in Moldova, said when answering questions from journalists on the financial sector, fiscal policy, and the real economy. “Real GDP in 2015 contracted by 0.5 percent, driven by the decline in agriculture on the supply side, and by weaker private consumption and investments on the demand side. We were a bit surprised that the difficult situation in the banking sector didn’t have a more profound negative effect on growth last year – this is something that needs to be better understood. The near term outlook remains difficult,” stated Armine Khachatryan.
Number of Moldovan millionaires went up
The number of Moldovan millionaires last year rose by 14%. Thus, in Moldova there are officially 358 millionaires in lei, as opposed to 314 in 2014. The information was made public by the head of State Tax Service Sergiu Puscuta in a news conference. Sergiu Puscuta said the youngest millionaire in lei is 21, while the oldest one is 76. More than half of the Moldovan millionaires (60%) said the salary is their main source of income.
Small Business Association: Government aggressively destroys small businesses
Members of the Small Business Association of Moldova said the activity of small traders based on an entrepreneur’s patent will be stopped in 2017 by a ‘monopolist act’. These ask the authorities to abrogate a provision of Law No. 121 by which retail trade at stands, kiosks, etc., authorized by the public administration, is excluded from January 1, 2017. In a news conference , these said the government bans small businesses that work based on patent because these create competition to monopolists. The Association’s president Eugen Roscovanu said the small traders sent numerous letters to the government by which they ask to be allowed to continue work based on the entrepreneur’s paten, but received only formal answers. In Moldova the small business sector is ignored, while in the European countries this sector forms the backbone of the economy. The authorities should create conditions for the small businesses to develop.
● WEDNESDAY, May 18
Agriculture Ministry looks for solutions to agriculture insurance problems
The Ministry of Agriculture and Food Industry initiated consultations with a view to solving the problems related to insurance in agriculture given the more often risks that affect crops, such as drought, hail and frost. The institution aims to effectively assess the insurance-related problems witnessed during the last few years. The Ministry’s administration and insurers shared this opinion, noting that the costs of insurance in aeroculture are now too high. It was considered the possibility of reducing the insurance percentage from up to 15% to about 5%.
Agreement to promote entrepreneurship among young people
Members of the 46 youth organizations that form part of the National Youth Council of Moldova will benefit from support from the Organization for the Development of Small and Medium-Sized Enterprises (ODIMM) based on a partnership agreement signed on May 18. According to a press release of the ODIMM, the accord provides that the young people will have access to the training courses, seminars and workshops staged by the Organization within its programs, especially the National Youth Economic Empowerment Program. The representatives of the two organizations agreed to work out an education program for the purpose and will together organize events centering on the economic empowerment of the youth.
Authorities urged to improve anti-smoking law
The National Association of Restaurants and Recreational Places of Moldova warn the authorities about inadvertencies and confusion in the so-called anti-tobacco law that is to take effect on May 31. It says the example of Romania, where the authorities started to amend a similar law, should be followed. The Association’s head Aneta Zasavitski said that not even two months after the coming into force of the anti-smoking law in Romania, which bans smoking in closed places or places limited by two walls, the Romanian senators voted several amendments designed to substantially change things. Following the amendments proposed by the Romanian authorities, smoking in public places in Romania could be allowed again soon. “Closed area” will be defined as an area with walls around, not only two lateral walls, as the current law provides. Furthermore, smoking will be allowed in separate areas that are completely isolated and on specially laid out external terraces. This means that a restaurant can have an external terrace with three walls where smoking will be possible.
● THURSDAY, May 19
2016 draft state budget law approved
The executive approved the draft state budget law and draft social and health insurance budget laws for 2016 in its May 18 meeting. Under the draft laws, the incomes of the national public budget this year will be about 48.512,4 billion lei, an increase of 11% on 2015. These will represent 36.3% of the GDP, up 0.5 percentage points on last year. The state budget incomes will total 31.378,9 billion lei, up 3.340,6 billion lei or 11.9%. The external grants will represent about 7.8% of these incomes. The European grants will represent 94.3% of the grants intended as budget support.
City Hall wants foreign investors to feel comfortable in Chisinau, Dorin Chirtoaca
More foreign investors in the capital city means development and jobs for the Moldovans, while the country will be able to integrate into the Europe Union and to attract investment from there, ensuring a comfortable working environment, Mayor of Chisinau Dorin Chirtoaca said in a news conference. The mayor took part in the conference in connection with the holding in Chisinau of the week “Joy in Movement”, supported by the hypermarket chain Kaufland, which intends to open a number of stores in the capital city. Dorin Chirtoaca said that Kaufland is a strategic investor for the Republic of Moldova. According to him, the fact that this company supports such events as “Joy in Movement” shows that it wants to know Moldova by a civilized method.
Central bank imposes penalties on former managers of Banca Sociala
The Executive Board of the National Bank of Moldova decided to impose penalties on the former managers of Banca Sociala. Thus, these are to pay a fine equal to ten average salaries in the financial sector into the state budget. According to a press release of the central bank, it was established that the bank’s administration violated the Law on Financial Institutions and the regulations of the National Bank of Moldova. The violations include mainly the classification and inappropriate assessment of the released loans, involvement in manipulation activities, non-compliance with the limits and requirements on risk concentration, involvement in risky and doubtful operations, non-compliance with the requirements on compilation of financial statements and of reports for prudential purposes, submission to the National Bank of reports containing erroneous prudential data.
“Moldova-Fruct”: Apple harvest in northern districts was practically compromised
Iurie Fala, executive director of the Association of Fruit Producers and Exporters “Moldova-Fruct”, said that owing to the ground frost of end-April, the apple harvest in the northern part of Moldova was practically compromised. Briceni district, where the largest volumes of apples are grown, is the worst-hit. The apple growers there risk going bankrupt. “We are concerned about the lack of reaction and measures to alleviate the consequences of the natural disaster of April 27, when the night frost caused enormous damage to the agricultural producers in general and the fruit growers in particular. Briceni district was the worst hit, followed by the districts of Edinet, Rascani, Ocnita, Donduseni and some orchards in Soroca. The damage is huge because there was -8 degrees Celsius in parts,” stated Iurie Fala.
● FRIDAY, May 20
Almost 20% of salary earners in Moldova in 2015 worked in budget-funded sector
In 2015, nearly 20% of the salary earners in the country worked in the budget-funded sector, which is about 235,000 people. The figure is by 8.9% lower on 2012. According to an infographic published by the independent think tank “Expert-Grup”, over 66,000 persons worked in the central public administration and a sum of 3.7 billion lei was spent on their remuneration. In 2016, the Ministry of Financed published the number of personnel units needed and employed for administering the central public administration institutions. The number of personnel units in the central public administration rose by 2% annually in 2012 - 2015. This was mainly due to the creation of new institutions at the central level.
Relationship with IMF has partially improved, expert
Moldova’s relationship with the International Monetary Fund (IMF) has partially improved. At the same time, the IMF now has major expectations of the Republic of Moldova, one of which is to pursue sustainable fiscal policy, economic expert of the Institute for European Politics and Reforms Eugen Giletski said in an interview for Radio Free Europe. The expert noted that the IMF’s current expectations of the Republic of Moldova are big. According to him, no geopolitical situation will secure an accord with the IMF for Moldova if the commitments made by the Government of Moldova are not fulfilled. The unclearness around the conversion of the state guarantee into public debt is one of Moldova’s biggest shortcomings before the IMF.
Conditions in which EBRD and EIB will finance construction of Ungheni-Chisinau gas pipeline
Dimitri Gvindadze, the new Head of the Office of the European Bank for Reconstruction and Development (EBRD) in Moldova, said that if the Government fulfills all the assumed commitments, including the signing of a memorandum with the IMF, the EBRD and EIB will be ready to sign the agreement to finance the Ungheni-Chisinau gas pipeline, to the value of €90 million, by this yearend. The issue was discussed in a meeting of Prime Minister Pavel Filip and Dimitri Gvindadze earlier today. According to the Government’s press service, the officials discussed the results of the cooperation with the EBRD local team, the investment programs in the energy sector, environment, road infrastructure and water and sewerage systems and the prospects of initiating new projects. In this connection, Pavel Filip noted that the launched programs are designed to meet the needs of the businesses and the people and also support the Government’s policies in these areas.
● Saturday, May 21
Moldovan entrepreneurs taught how to increase turnover
The entrepreneurs should not be afraid to charge higher prices for their products and services, but should also ensure their high quality so as to attract rich clients. These and other pieces of advice for increasing turnover were given in the conference “Business in Moldova 2016” that had the slogan “New possibilities and rapid result in modern economy”. The conference was staged in Chisinau by the company “Contabilizare” on May 20-21. Ruslan Bah, marketing consultant at “Contabilizare”, told the participants in the conference that regardless of the area of activity, there will always be someone who will charge a lower price. Thus, competition based on prices is not successful.
